Systemic inequalities, implicit biases, and a mismatch between the needs of investors and women-led SGBs have all contributed to the $93-billion financing gap faced by women entrepreneurs across Latin America.
On behalf of social enterprise Pro Mujer, the research team conducted a review of recent literature and 40 interviews with entrepreneurs, investors, business development service (BDS) providers, and experts in the Mexican entrepreneurial ecosystem to better understand the barriers women-led SGBs encounter when raising capital. The interviews revealed that women entrepreneurs have diverse profiles and needs. Some women entrepreneurs challenged the team’s hypotheses that the gender gap in investment was driven by unequal representation in high-growth sectors, time poverty, and a gender imbalance within investment institutions. Traditional financing options are not meeting the needs of women entrepreneurs. These entrepreneurs also need access to the appropriate investment networks. Some suggested that sociocultural norms cause their businesses to be evaluated differently during the investment process.
When asked about the gender gap in early-stage investment in Mexico, investors reported perceptions of women entrepreneurs as risk-averse, a mismatch between investment offerings and the business needs of women-led SGBs, and a disconnect between investors and BDS providers. There is significant room to improve gender parity within their portfolios and institutions. Several investors highlighted the importance of actively sourcing women-led businesses and increasing the voice of women on their investment teams. Overall, team’s recommendations point to the need for investors and BDS providers to incorporate a robust gender lens into their portfolios and programs to create a clear path to investment and increase the flow of capital to women-led SGBs.